So, you’re ready to buy a home. You’re asking around and your family and friends have a lot of input, but you can’t help but to think...are they even remotely informed? And why are people who still rent apartments telling me how to buy a home? Shouldn’t I be talking to someone who does this for a living? Have no fear, your instincts are correct!
The Indy Home Pros Team has been ranked the #1 Real Estate Team in Indianapolis by The Indianapolis Business Journal for 4 years running, and we do not take this honor lightly. We specialize in ensuring your first time home buying process goes as smoothly and as magically as possible. Sure, there are hundreds of pieces of paper and documents that go into buying a home, and there should be; it’s the biggest purchase of your life! But we take care of that, that’s our job, not yours!
There can never be a complete guide to buying a home, because each home buying experience is unique to you. So below are some quality steps to take instead, and if followed, will get you through it!
1) Get Pre-Approved
All this means is that you call a mortgage broker (most likely your friend you see spamming your Facebook Feed that you have no idea what they do for a living, yes, that’s a mortgage broker) and give them some info about your life. i.e. how much money you make, how much debt you have, and they will come back to you, hopefully, with a money amount that you are able to safely spend on a home, say, $145,000.
2) Find and Hire a Realtor
Just because your Uncle Billy Bob is a realtor does not mean you have to use him. In fact, you likely shouldn’t. Didn’t he have one too many and fall off the porch last Christmas? Is that really who you want showing you houses? Plus how awkward will it be when you have to fire your own kin? Distance yourself slowly and pick an Indy Home Pro instead!
The market has changed since the 1990s and you need a realtor who is active and knows the current market and trends, knows all the relevant paperwork and how to execute it QUICKLY, has relationships in the industry with current title companies and so on and so forth, things you don’t need to think about because you are using a realtor!
That’s it! You’ve done your job, now let your Realtor do theirs! Just Kidding. Much more valuable info is below!
3) Don't eliminate homes that aren't up to par in your eyes as there are loans available to assist in renovating properties before you move in.
These are 203K loans that will allow for budgeting in renovations prior to close and can range from a simple bath or kitchen remodel to a full blown, top to bottom overhaul.
4) If financing is an issue, check with family to see if they can gift you funds for a down payment. This is allowed and can help new home buyers get things off the ground for your first time around.
5) Seek out lenders that can offer 0% down assistance to first time home buyers. Additionally, be aware that there are government loans that allow for the same type of financing as this in the form of a VA or USDA (rural) loan.
You’re setting out to buy a home and it’s likely one of the most exciting, and stressful, times of your life. And while it can be tempting to jump on a home search site that rhymes with pillow and go for it, you can now avoid the common pitfalls of first time homebuyers by naking sure you don’t commit any of these 5 mistakes that others have already made for you!
Like we said above, it can be tempting to get online and GO FOR IT! But then, you find it, the house of your dreams! BUT! By the time you find a realtor and try to set up a showing, someone else submitted an offer and it was accepted. But how? How were they so quick? They were Pre-Approved!
Getting Pre-Approved is the first, and arguably most important, step in the home buying process. Getting Pre-Approved is as simple as contacting a Mortgage Lender, filling out a form, and then seeing how much house you can afford based on things like your income, debt, savings, etc.!
Depending on where you are buying your home, your personal background, and various loan options; you could qualify for a first time home buyer program! This could mean a significantly lower down payment than the once standard 20%, lower monthly payments, and other saved costs!
Most new home buyers start their home search by looking at existing homes, and don’t ever consider building a new home because they think it’s too expensive. This is no longer the case these days! Companies like M/I homes offer SMART Options, meaning a brand new home in a community like Fisher’s can be yours for less than you think!
Checking your credit report to make sure it’s accurate. Lenders will go over your credit report with a fine tuned comb, so making sure everything on your report is correct is essential in getting the best loan rate and option for you. Pull your report from one of the major 3 companies, or use another credible site. Take it up with one of the 3 major companies if there is something on there you find incorrect.
Before your mortgage is final, do not mess with your credit! This means no applying for a new credit card, no booking that European vacation via credit, or anything else credit related. Applying for or adding new credit has the potential to lower your credit score, and this could in turn have an impact on your loan.
Deciding to sell your home is a huge undertaking, and there are numerous items to consider when doing so. From the simple thought of where to move next, to the complex details of accepting an offer, from negotiating with a buyer through inspections and repairs, to moving the process through title work so the home's deed is transferred correctly, the home selling process can become convoluted quickly.
In today's day and age of online marketing, online document sharing, digitization of media, and thousands of resources devoted to staging, design, inspections, and repair, it can be easy for families to lose site of where to start and how it will end. Choosing to sell a house on your own can be an undertaking many homeowners find overwhelming and time consuming, and most often end up changing their minds. But then there's the important decision they must make on who to hire to get the house sold.
Preparing to take on such a task of listing a home for sale entails some serious work and should begin with a Realtor. Interviewing agents is the best way to feel more comfortable about the decision to sell your home. And interviewing agents will allow you to, hopefully, garner a relationship with an agent you feel most confident in, and who will do what they're paid to do - sell your home. But what should you look for in an agent and why?
Today, as opposed to just a dozen years ago or so, online inquiries of homes for sale dominates the landscape. Over 90% of all home searches begin online, and where someone begins can have a bearing on how your own home sells. Did you know that the major sites, like Zillow and Trulia, don't list all homes that are for sale? Even some big brokerage listings aren't placed on these sites because of differences in agendas. So, be sure to inquire if your home will actually be listed on these sites. These sites are chalk full of inaccurate information as well, so be prepared to review them prior to listing to make sure specs are up to date.
Deciding on the price of your home is another major obstacle to overcome with an agent and, more importantly, yourself. Are you prepared to potentially learn your home isn't truly worth what you think it's worth? Always remember that it's not you or the agent that dictates what your home is worth, it’s the market. Any agent or online program can tell you what they think it's worth, but the true indicator is the price at which homes similar to yours in quality, age, and size have been selling for in your area.
Deciding on what agent or team to use to market and sell your home is no easy undertaking. While interviewing agents, find out what they do to market the home that's out of the norm. Everyone's home will be put online but, as stated earlier, not all major sites will be utilized. Verify how the agent will push your listing to market and via what platforms. Ask what their marketing budget is, where the most money is spent, why, and for how long. Our team, for instance, is one of the biggest spenders with Zillow and Trulia so that we capture more buyers for our listings. We additionally budget funds for advertising on Facebook, LinkedIn, and Instagram. These social sites create a buzz and we know how to get that started.
What kind of yard signs will be installed? Will the pictures be professional or taken on the agent's cell phone? Do you have an option for drone footage or 3D mapping and imaging? If so, who does this? The agent, or a professional services that does it on a daily basis? Once these images and videos are posted online, how do they track traffic and how do they focus on verified demographics to push these media types out? It’s complex...but in today's market, you need to be coupled with an agent or team that understands the digital age, not just someone who posts "I Just Sold This House" on Facebook.
The other main topic of selecting the right agent for the job, I believe, is contract negotiations. Many sellers feel that an agent that can get them the most money for the house is the best negotiator. But, how would you ever know if that's the case? Beyond the final sales price, what other pieces of the process can cause the final sales price to fluctuate? Typically, the inspection response and the appraisal. How well do you think your selected agent can manage a transaction with another agent at this critical moment in the process? Being able to understand all options available to a buyer and seller in regards to repairs is essential.
Inspection response and repairs can cause many deals to fall apart. I believe this to be the hardest part to navigate for most agents, but it doesn't have to be. Preparing the seller of what to expect during this point of the sale needs to take place in your initial interview. Have them walk the house and share with you what they see in the house that he/she believes needs to be addressed before listing. Do they know and understand the appraisal process to be able to call out items that need repaired before even showing a house? Do they know what is expected in an FHA appraisal as opposed to a conventional loan appraisal?
Negotiating through inspections is probably the most taxing part of the process (aside from packing boxes for the move) but an appraisal can be the most nerve racking. There's not much you can do but let the appraiser in and wait for his blessing. Or receive the bad news - your home didn't appraise. Now what?? Is your agent well versed in speaking to an appraiser and pleading your home's case for being worth more than they said? Can your agent even speak to them? Will it matter? What if it's an FHA loan, which will remain "attached" to the house for months, no matter who buys the home?
As you can see, getting through inspections and an appraisal takes some navigating, and it should be done by someone who understands the process and guidelines. Don't be afraid to ask the agents you interview what experience they have. How many homes have you sold? Where? For how long? What did you do before you got into this business? You may be surprised to find that some of the best agents in the industry haven't been doing it for dozens of years. They come from financial backgrounds, insurance, teaching, law enforcement etc. Just know that there is not necessarily a positive correlation between how long someone has been in the business and their ability to sell your house effectively or for the most money. So, just ask!
Selling a home can be one of the most stressful occurrences in anyone's life, but with the right agent, it doesn't have to be. Selecting the right agent who puts your mind at ease with their understanding, compassion, knowledge, and experience can make a huge difference during the process. Do your homework, ask questions, and don't rush if you don't have to. A good agent will tell you when a good time is to list but never push you to do so.
Best of luck in your decision to sell your home!
-Josh Latham | Realtor/Broker | Indy Home Pros Team
Congratulations! You are now about to take on the next chapter of your adult life. We know how exciting it can be to finally have a property under your name. But let’s face it, home buying is not all excitement, it’s nerve-wracking too. Most especially if you are a first time home buyer. So to make your first-time home buying journey a little less stressful, here are important factors to keep in mind and some tips from our seasoned agents to help you navigate the process more smoothly and save money.
Check your finances to make sure you are ready for this new responsibility. Play around home affordability calculators online to give you an idea of how much is within your price range. After knowing what you can safely afford to spend for a house, start saving money for down payment. ( Tip: Setting aside your tax refunds and bonuses is one of the best ways to save for down payment apart from setting aside a budget from your main income.)
In as much as we want to, not all of us can afford to pay in cash. So if you are planning to make a mortgage loan, make sure that your credit is in good standing. It is the key factor in whether you’re approved and will help determine your interest rate and possibly the loan terms. Look for opportunities to improve your credit and dispute any errors that could be dragging down your credit score.
Research and determine the housing loan package that best suits your paying capacity. Also, make sure to compare the mortgage rates. According to the Consumer Financial Protection Bureau, comparing mortgage rates from at least three lenders can save you more than $35,000 over the first five years of your loan.
Apart from saving for down payment, you also need to budget a significant amount for the money required to close your mortgage. Generally, closing costs can run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections, and title searches.
Don’t think that your expenses end with your down payment and closing costs. You also need to save a buffer for what will go inside the house. This includes furnishings, appliances, rugs, updated fixtures, new paint and other personal touches you want once you move in.
One concrete way to determine how much you can really afford for a home is to get pre-qualified. You’d be totally bummed if you found a perfect home only to learn that you can’t really afford the house right?
Now, getting pre-qualified is good. But as you get closer to buying a home, it’s smart to get a pre-approval where the lender thoroughly examines your finances and confirms in writing how much it’s willing to lend you and at what terms. Besides, having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.
Is it a condo or a house? How many bedrooms would you want to have? Where do you want to live? What other specifics do you want in a home?
Home searching can be very overwhelming. Knowing exactly what you want would help you narrow down the search to save time and avoid stress.
You need someone to represent you and guide you through the process. Since you will be working closely with that agent, it’s essential that you find someone you get along with well. The right buyer’s agent should be highly skilled, motivated and knowledgeable about the area.
Take time for viewings with your agent and check out open houses. There are specific details that a photo simply cannot illustrate so it is important that you see the property. This will also give you the opportunity to have an overall feel of the interior and check the view of the surrounding area.
Which properties did you like best? Put them in a rank and take a second look at your top choices. (The photos are to help you remember while deciding.)
While viewing homes with your agent, look for properties that cost a little less than the amount you were preapproved for. Think of the maximum amount as the ceiling - it doesn’t account for a broken dryer or washer or any other expenses that arise during homeownership.Rather than maxing out that amount, set a lower purchase budget to leave yourself wiggle room for unexpected costs.
You can’t find a house that’s perfect in every way. So you need to think carefully about what you’re willing to compromise. Be ready to let go of the little things and details. Remember our number 5 tip? That what it’s for- the little things.
In tip number 6, we mentioned that having a pre-approval letter in hand will give you an upper hand over buyers who haven’t. However, in a competitive market with a limited inventory, it’s possible that you’ll be bidding on houses with multiple offers against buyers that are already pre-approved. Although it can be very tempting to make a high-priced offer that’s sure to win when you find a home you love, don’t let your emotions take over and stick to the budget you can afford. Your realtor can help you with tactics to win over the seller.
Your lender will require you to buy homeowners insurance before you close on a new house. Be sure to shop around and compare prices. Don’t forget to look closely at what’s covered in the policies.
Take note of the ff:
- A less expensive policy usually means fewer protections and more out-of-pocket expenses if you file a claim.
-The insurer can drop your property if the home condition isn’t up to snuff. It is advisable that you be prepared to find a new policy quickly if it sends someone out to look at the property and isn’t happy with what it finds.
-Flood damage isn’t covered by homeowners insurance, you may want to buy a separate flood insurance if your new home is in a flood-prone area.
If your offer is accepted, you’ll have to pay for a home inspection to examine the property’s condition. Take note that not all inspections test for things like radon, mold, or pests; so make it a point to know what’s included. Attend the inspection and pay close attention. Don’t be afraid to ask your inspector to take a closer look at something and ask questions.
The reason on why it is pivotal to have an agent in buying a house is because you need someone to guide you throughout the process. So don’t hesitate to ask if you have questions. Your agent’s job is to make sure that your questions are answered and feel comfortable with the whole process.
Having your own home is dream people nurture, but not everyone would be financially competent to own a home. So before you start dreaming of your own home ensure that your finances are ready because you don't want to struggle to make money later on. Here are certain things to consider when you buy a Indianapolis homes:
Find a mortgage broker
You need to choose a mortgage broker before you start with home hunting. A mortgage broker is a person who stands between you and the bank and help you get the funds needed to purchase a home. The broker will help you with the paperwork and passes on the same to the bank/lender. While the brokers do not lend money to people themselves, they help in finding the right loan for them. It is under their sole advice that most homeowners apply for loans and get them.
Order a free credit report
It is a known fact that to apply for home loans, you must have good credit reports. Of course, there are many ways to get your credit report, but you have to pay for them. You can also request by mail or telephone. To get the free report, you need to send in two copies proving your identity; could be your health card, diverse licence or social insurance card.
Determine a down payment
To determine your down payment, you need to figure out how much you are willing to pay and how much you would have to borrow. If you can pay around 20% of the price of the home, then it would be perfect because then you would qualify for conventional mortgage. As majority of Indianapolis homeowners are couples in their 20s and 30s, they are looking to spend somewhere between $320,000 and $370,000. The basic thing is this - the more you pay for your down payment, the less you pay as mortgage fees.
Get a pre-approval or pre-positioning letter from mortgage broker
Having an official letter signed by your mortgage broker would prove that you are capable of getting a loan. The broker should be competent enough to ask the client the necessary details before handling the paperwork for pre-approval.
We all desire to have our own home one way or the other, however buying a house is not an easy task to do. It involves a lot of time and effort before finally buying one. There are factors to be considered before buying your home and here are some of them.
Before you actually acquire one, get yourself pre-qualified for a loan. This would save you from the agony of buying houses you can’t actually afford but will put you in a better position to ultimately find the precise house offered. Basically, the lender will ask for documenting requirements and let you fill up an application form. They would as well check your credit standing that would determine if you are qualified to take a loan. If you have a good credit rating it would be easy for you to get a mortgage.
Before you get a mortgage, be sure that your credit history gets a clean slate. Get a copy of your credit report and check if all the entries are correct, if you see any problem, fix it now.
Depending on how much you can afford, find a house that fits your budget. Determine your debts, expenses and your monthly income so as to know exactly how much will be left for you to pay for your house. Handle your finances well by paying for important and basic necessities only rather than buying things that you can do without.
If you have the money, ask the help of an expert Indianapolis realtor. He will be of great help in finding a good house for you in a desirable location at the same time considering your price range and preferences.
Your real estate agent usually provides a list of homes for sale within your neighbourhood along with their prices and locations. Compare the prices as well as the amenities of the houses you are interested in. Get the most suitable offer for your budget. Search thoroughly and take into account the location. Check things like is it safe for the kids, is it near schools or churches or your workplace, does it have supermarkets or shopping malls or parks where you can relax and have fun with your family.
After you have set eyes on your dream house, make sure you conduct a home inspection via a home inspector. In this way, you would know if the house is really worth your time and money
Imagine having a house of your own, complete with all the amenities and home furnishings that money can buy. It would be great to have one especially if you have the money to buy the property. Easy you may say, but that is not entirely true, because finding a house of your liking can be a strenuous and challenging venture. It really needs much of your time and a lot of effort to do this. Here are a few considerations when buying a house.
Establish Your Resources
When buying a property, make sure you establish how much resources you have to be able to make a realistic budget. This will decide the price range you are able to pay for a home. Take note of your present income as well as debts, if any. How much is left of your income every month after you have paid all your bills. This will give you a clearer picture on how much mortgage you can actually afford.
Check Your Credit Score
Your credit score will determine whether or not you will be qualified for a home mortgage loan. In case you have an adverse finding, it will lower your chances of availing a loan. So make sure to take care of your credit standing. This is one of the basis for the lending institution in determining just how much they can actually lend you.
Save Your Funds in the Bank
Just before you avail of a mortgage, make certain that you have funds saved in a bank as mortgage lenders usually check them. Since you have to pay some fees during the closing process, and other unanticipated expenses, the more funds you can save prior to applying for a home loan, the greater the chances of approval.
Look for a Reliable Real Estate Agent
You need an expert on this, especially when you are a first time buyer. Indianapolis Realtor can conveniently help you in your search for that ideal home. They have a lot of connections in the market and they know exactly where to look. They would be able to assist and teach you how to go about the business of buying a property.
A lot of homeowners are searching for home loans that is affordable, whether for the purpose of buying a new one or making improvements in it. That is why the FHA 203k financing was established by the Department of Housing and Urban Development or HUD. The main objective of this program is to help the borrowers in financing for their housing needs, providing favorable loan terms, a much higher loan limit, and lower down payment options for those buyers who are qualified to avail. FHA 203K can also be used to buy foreclosures as well as short sales.
If you are interested to buy an Indianapolis real estate and wanted to avail the FHA 203K program, there are certain things you need to be aware of. The main purpose of the 203K program in Indianapolis is that, it is specifically intended to provide loans on obsolete, distraught, badly maintained or uninhabitable properties that may not be qualified in a conventional home loan for rehabilitation or renovation purposes.
The first thing you need is an expert 203K loan agent and lender to make a successful rehabilitation project. After you have set eyes on a particular property, the ones involved in the process would be Department of Housing and Urban Development, a 203k consultant, your real estate agent, your mortgage lender or lending institution, a contractor and appraiser.
Your agent can help in determining the estimated value of the property by way of a market analysis. This would include the extent of the rehabilitation needed, you may need the help of a 203K consultant to have an accurate estimation. A contractor will be able to assist in making a rough estimate of the work to be done and the agent can determine the expected market value of said property by the time it gets completed.
A provision in the contract should state that the buyer has applied for FHA 203K financing wherein it says that said contract is contingent on approval of the loan and the acceptance of the buyer’s additional mandatory improvements as set on by HUD, the appraiser or the rehabilitation lender.
After the contractor’s bid and the appraisal have been agreed and accepted, the lender will prepare and issue a Statement of Appraised Value and a Conditional Commitment to ascertain the maximum mortgage amount for the specified property. He will likewise issue the Rehab Loan Agreement along with other documents needed for the mortgage closing. Said agreement will be executed by the borrower and the lender with the condition of releasing the funds via the Rehab Escrow Account. Construction starts after the proceeds are disbursed and work is not allowed to stop at any given time for more than one month or 30 days. Dependent on the type of loan and extent of work, the buyer has until six months to finish the rehab project.
Central Indiana's real estate market for the nine-county area countinued upward from April thru June 2012 approximately 15% from the same time frame as last year. This is good news for the Indianapolis Real Estate Market. Check out the RE/MAX of Indiana press release for information.
FHA has announced that they are extending the anti-flipping rule thru 2012 for investors who purchase properties and rehab them and put them immediately back on the market for sale. FHA has a standard 90 day rule to prevent investor flips but FHA has extended this time period. Any sales increases of over 20% must be proven and approved. Most times two appraisals will be required.
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Indianapolis IN 46234
dennis@indyhomepros.com
317-316-8224